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Endo International Concealed Par Pharmaceuticals Conduct Securities Class Action

Endo International plc develops pharmaceutical products and generic drugs, so its acquisition of Par Pharmaceutical Holdings, Inc., a maker of generic drugs, must have seemed like a profitable move. But the date of the acquisition, September 28, 2015, is the beginning of the class period for this case, during which the complaint claims Endo concealed information about Par and its conduct that mattered very much.

The class for this action is all persons who acquired Endo securities between September 28, 2015 and February 28, 2017 and were damaged by the corrective disclosures.

The complaint quotes the Endo press release at its acquisition of Par: “Endo has further established its position as a leading global specialty pharmaceutical company with a fast growing generics business… The acquisition also helps position Endo for long-term double-digit organic growth, enhanced cash flow generation, and increased financial flexibility.”

Although Endo reported net losses in its 2015 10-K, its generics segment reported net revenues of $1.67 billion. The complaint quotes the report as stating that in acquiring Par, “we have strategically expanded our technology, manufacturing, handling and development capabilities to a diversified array of dosage forms” and that the company expected “more sustainable market share and profitability.”

In the same filing, Endo admitted it was the subject of antitrust investigations and lawsuits but merely said it was “unable to predict the outcome”.

Its 10-Q for the first quarter of 2016 again reported net losses for the company but net revenues of $211 million for its generics business. Its 10-Q for the second quarter reported net income of $343 million, with net income of $214.97 million for generics.

On September 23, 2016, Endo put out a press release naming Paul Campanelli as its CEO. Campanelli had been president of Par, and Endo praised his “impressive track record of delivering strong operating results”.

However, the complaint claims that during this time, Endo was concealing information: that Par had colluded to fix generic drug prices, that the “double-digit growth” the company expected was to come in part from Par’s illegal price-fixing, and that Campanelli’s “impressive track record” was due in part to that illegal activity. The complaint alleges that the company’s revenues were therefore unsustainable and its public statements false and misleading.

On November 3, 2016, the complaint claims that the truth began to emerge with reports that US prosecutors were considering filing antitrust charges against Par and other companies. At this news, the complaint says, Endo’s stock price fell by nearly 20%.

According to the complaint, Endo’s 10-K annual report for 2016 reported a net loss of $3.35 billion, “[r]eflecting the extent to which Par Pharmaceutical’s unlawful conduct had previously inflated Endo’s revenues”. At this news, Endo’s stock price fell again.

On October 31, 2017, Par was named in the antitrust case on generic drug price-fixing, in which the companies were alleged to have conspired to inflage prices and divided up the market to reduce competition for fifteen generic drugs.

Article Type: Lawsuit
Topic: Securities

Most Recent Case Event

Endo International Concealed Par Pharmaceuticals Conduct Securities Complaint

November 14, 2017

Endo International plc develops pharmaceutical products and generic drugs, so its acquisition of Par Pharmaceutical Holdings, Inc., a maker of generic drugs, must have seemed like a profitable move. But the complaint claims Endo concealed information then and over the next many months: that Par had colluded to fix generic drug prices, that the “double-digit growth” the company expected was to come in part from Par’s illegal price-fixing, and that new CEO Campanelli’s “impressive track record” was due in part to that illegal activity. The complaint alleges that the company’s revenues were therefore unsustainable and its public statements false and misleading. 

endo_intl_sec_compl.pdf

Case Event History

Endo International Concealed Par Pharmaceuticals Conduct Securities Complaint

November 14, 2017

Endo International plc develops pharmaceutical products and generic drugs, so its acquisition of Par Pharmaceutical Holdings, Inc., a maker of generic drugs, must have seemed like a profitable move. But the complaint claims Endo concealed information then and over the next many months: that Par had colluded to fix generic drug prices, that the “double-digit growth” the company expected was to come in part from Par’s illegal price-fixing, and that new CEO Campanelli’s “impressive track record” was due in part to that illegal activity. The complaint alleges that the company’s revenues were therefore unsustainable and its public statements false and misleading. 

endo_intl_sec_compl.pdf
Tags: Antitrust, Concealing Information, Providing False or Misleading Information, Securities, Stock Losses